18.4.09

FDI inflows defy slowdown

Foreign direct investment (FDI) inflows into India nearly doubled to Rs 13,400 crore in January compared with the previous month’s tally of Rs 6,900 crore, on account of higher inflows from Mauritius, Singapore and Japan. The three Asian countries together contributed more than 55% of the total inflows in the month that witnessed a revival after three months of decline, according to the data compiled by the commerce and industry ministry. The year 2008-09 started on an impressive note by recording FDI inflows of Rs 15,000 crore in April, followed by Rs 16,000 crore in May. Inflows started slowing down in October, which saw inflows of Rs 7,284 crore, and remained low till December 2008. FDI inflows during the April-January period stood at Rs 1,05,700 crore compared with Rs 98,664 crore in the fiscal year 2007-08, despite a recession that affected most of the developed world. Mauritius remained the largest source of foreign investment, with the island nation contributing Rs 9,545 crore in FDI inflows during the April-January period, as against Rs 6,545 crore in the same period of the last fiscal. Singapore replaced the US as the secondlargest source of long-term investments into India. Singapore, which was placed fourth last year, saw its investments growing to Rs 3,237 crore during the period from Rs 1,532 crore in the same period last year. However, the FDI figures captured by government statistics may not necessarily reflect the actual origin of investment. For instance, tax havens like Mauritius are used by investors from across the world to invest in India. While Mauritius remains the top source of such FDI routed into India, other tax havens are also catching up. European hub Cyprus is gaining ground as a favoured route for channeling FDI into the country. Investments from Cyprus climbed to Rs 1,040 crore in the April-January period of 2008-09 from Rs 653 crore in the same period of the previous fiscal. Among industry segments, services sector was the highest recipient of FDI at Rs 5,061 crore. FDI flowing into sectors such as computers, telecom and real estate stood at Rs 1,600 crore, Rs 2,374 crore and Rs 2,408 crore, respectively.

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